Pension assets are a crucial element of a person’s financial life and ensuring there is enough for retirement remains a key problem for thousands. Unfortunately, new research from Scottish Widows has revealed this difficulty affects some people more than others.
According to their latest Women and Retirement Report, the gender pension gap has closed to one percent, the narrowest on record.
This is undoubtedly good news as the ported details 59 percent of women are now saving adequately for retirement, but there is still a long way to go until true equality is reached.
The same research found a persistent pay gap and part-time working ratio means women saving adequately on the median wage are still saving £1,300 a year less than men.
To illustrate, this means or a woman to save the same amount into her pension as a man, she will need to work an extra 37 years, which would take her over the age of 100 if retiring at state pension age, a number that is likely to grow as the full economic impact of the pandemic is realised.
READ MORE: Pension withdrawals rise by 6% – warning issued as pots may ‘deplete’
This problem is particularly prevalent among young women, with just 46 percent of those in their 20s saving the recommended minimum 12 percent of salary.
This compares to 56 percent of men at the same age and to almost two-thirds (64 percent) of women in their 50s, showing that women tend to save more as they get older.
While young workers may feel they can make up for lost time in their later years, it should be noted they’ll likely miss out on the benefit of compound interest if they don’t get saving early enough.
Jackie Leiper, the Managing Director of Workplace Savings at Scottish Widows, commented on the findings: “While we’re heartened at the record levels of saving, there’s still a mountain to climb before we reach true gender pension parity.
State pension warning: Starting amounts may be lowered [WARNING]
Martin Lewis helps Retiree gets ‘astounding’ £82k back payment [EXPERT]
Martin Lewis breaks down ‘important’ pension tax rules [INSIGHT]
“Women face decades of extra working before they’ll have a pension to match that of a man’s, which is unfair and unacceptable.
“Until we can resolve structural inequalities, from the gender pay gap to the uneven division of labour at home, we will never have pension equality.”
Many of these issues, according to Scottish Widows, are the direct result of structural and systematic challenges associated with the modern working world.
The pay gap is one such problem, with Scottish Widows highlighting that of workers in full-time jobs, men earn on average £6,100 more a year, a figure that increases to £10,800 for all employment types.
Additionally, extra commitments such as childcare also tend to fall on women, reducing the number of hours they are able to work and therefore limiting earnings.
In 2020, three-quarters of all part-time workers in the UK are women and the majority of UK families with a child under four consist of a father working full-time and a mother working part-time.
Unfortunately, coronavirus has likely set women workers back further as the pandemic has likely amplified the problem as statistically, women are more likely to be working in shutdown industries, such as the hospitality trade.
As part of its research Scottish Widows worked with a group of women about how the pandemic was affecting their work-life balance and pension prospects.
One of the case studies shared concerned Beth, 40, a part-time carer who is on a zero-hours contract and has three children.
Her situation may ring true for many people in a similar position, as she detailed: “I think we have not saved enough and we might struggle, especially for me, being a woman who hasn’t set aside for pensions.
“I’m very much reliant on my husband’s [NHS] pension and I’m not sure when he’s going to get that or if his working age is going up or if my working age will go up.”
Jackie concluded with a call for the government to make drastic changes: “In a matter of months the pandemic is reversing years of progress.
“We’re calling for urgent pension reforms that will help more women save more for retirement, including improved childcare provisions, enhanced pensions for those on maternity leave, the inclusion of pensions in divorce proceedings, and the scrapping of the auto-enrolment minimum earnings threshold.”